Spain's FerroAtlantica, a subsidiary of Ferroglobe, has suspended the last two furnaces in operation at its ferro-manganese and silico-manganese plant in Boo, in northern Spain, owing to high energy costs.
It is unclear when the plant will return to production, the company said. "The restart depends on the evolution of the price of energy in Spain since the situation makes production costs unsustainable for the electro-intensive industry," Ferroglobe's communications director Cristina Feliu Roig told Argus.
With this closure, Ferroglobe has temporarily idled the furnaces at all its plants that produce silicon metal, ferro-silicon and ferro-manganese in Spain — Sabó in Galicia, Boo in Cantabria, and Monzón in Aragón — owing to the energy crunch.
Like the rest of Europe, Spain is wrestling with climbing gas and power costs despite having a price cap in place. August was the most expensive month for electricity in Spain since records began, with an average price of €308/MWh on the wholesale market.
In order to mitigate the impact of higher energy costs, VAT on gas will drop from 21pc to 5pc from October until the end of the year, prime minister Pedro Sánchez announced on Thursday. This measure could be extended until 2023, he said. The industry has welcomed these measures but "more action is needed to support a sector whose viability relies on energy prices", a representative of trade union Comisiones Obreras said in a radio interview.
Several other industrial facilities in Spain are also coming offline because of soaring energy costs. Leading steelmaker ArcelorMittal announced on Thursday that it is idling blast furnace A at its Asturias plant in Spain in response to weak demand. Today it said that it will idle three blast furnaces at its Bremen site in Germany from the end of September indefinitely, owing to unsustainable energy costs in Europe.
Production cuts throughout Europe caused by high energy prices are likely to further weigh on ferro-alloys output, but it does not necessarily mean an increase in prices because of the weak market conditions that are also hammering European steel mills. At the moment, there is not a clear price direction and prices have remained stable.
Argus-assessed prices for high-carbon ferro-manganese remained flat at €1,200-1,300/t ddp on Thursday as buying interest from European mills remained slim.
Similarly, silico-manganese prices remained stable at €1,240-1,320/t ddp on sluggish appetite for fresh spot bookings.
